Mineweb - Soros et al sell gold ETFs. This was the big news this week, which might have had a negative effect on gold and the miner ETFs - Q4 saw some big funds cut down their gold positions.

As Jojo reminded me, the important thing is that this selling was done in Q4 - i.e., it already happened. And y'know what? It would have been smart, since then you could move your money into the SPY at the November bottom!

(Speaking of which, I thought something was funny when looking at the big dump in the daily chart of Dundee Precious Metals - it's a stock with massive robot participation and very little retail, as you can tell if you try and buy because they'll game the price away from your bid. That one stock's action is often a giveaway that the big boys are doing something.)

And, of course, every miner except Goldcorp came out with gruesome year-ends that included massive writeoffs. (Funny enough, Goldcorp was also sold down, despite a supposedly decent quarter, which is also interesting).

It's almost like the perfect storm for gold and its miners. So, now you have to ask how much worse can it get?

In a way it depresses me, but in another way the sentiment around the miners is about as bad as the sentiment around BP was in summer 2010, when everyone thought they were going to have to go bankrupt after destroying the Gulf of Mexico. That would have been a fantastic time to buy BP.

So I can see how much things suck. But, again, same as with my opinion of the US economy, you have to ask: what is the forward outlook for miners at this point in time?

I'm not interested in buying back in while stocks are going down. But I'll be happy to buy back if they start going up, and that really should happen sometime, no?

Beyond brics - BB interviews Noam Chomsky. Several points of interest here. #1, despite the author's blather, Chomsky has always publicly said that there are many places to get real news, including FT and the other newspapers of the plutocracy. Why? Because the rich can't afford to lose money from being misinformed. #2, I'd be interested in Otto's take on Chomsky's opinions on Latin America - especially where he suggests Chavez and Morales have been successful at reducing poverty.

Bonddad - on Italy and Spain. His opinion is vaguely negative on Italy and much moreso on Spain. I'd still retort that the forward outlook must be better than the present numbers; and besides, the plutocrats wanted to destroy the Spanish and Italian economies, right? That's the point of "internal devaluation", no? So this is a good thing, yes?

Reformed Borker (Bork Bork Bork!) - Ari Wald on what could trigger a pullback. Yes, some negative sentiment could pop up and begin to feed back. And it might happen simply because of boring old seasonality; maybe the bull move during earnings season will stop when earnings season ends; or things could stop, maybe, because of a rise in gasoline prices, which Bonddad has noted are a choke collar on the US economy. And it probably won't be a crash, just a rangebound dithering or a slow drift vaguely downish. But at the same time:

Reformed Borker (Bork Bork Bork!) - If this isn't a rotation, you tell me what you'd like to call it. Again, he starts with hard data and ends with a "so there, bitch!". BI - Raising the US minimum wage is a stimulus package. That's because poor people have to spend every penny that comes in just to survive: so you should pay your poor people more! But more importantly, it'll gain yet more voter support for the Democrats when the Rethuglicunts start screaming about how they hate poor people, want to see them starve, and actually wouldn't it be good to eliminate minimum wage altogether instead of just for the illegals we hire from Mexico?

"I hear from one of those "friend of a friend" type of deals that they are getting redemptions left, right and center. They have to dump a lot of holdings. Take a look at GCM.wt. All that dumping of the warrants en masse over the last couple of weeks is them. AUN is another likely victim. This has nothing to do with the shape of the company. It has to do with the shape of the shareholder."

Sprott's made his money sending out little boys like David Franklin (and his new pet clown Rick Rule) to blather the Ron Paul line that the world was ending, blah blah fiat blah blah Weimar blah blah Zimbabwe, for the past couple years.

Now all the lemmings he's lured in with this eschatological hyperbole have seen their crappy gold and silver mining stocks (and worse, explorecos and development plays) faceplant with 50-90% losses - and meanwhile the US failed to implode, instead seeing market tickle the secular bear highs.

So why wouldn't Sprott be getting crucified with redemptions?

And, after all, Sprott tends to limit their holding of a stock to just under 10%, to ensure they can puke at will without being required to report as insiders.

So maybe this thing we're going through right now is a cleansing. After all, as long as you have a large number of analysts and newsletter writers getting their flocks into gold and silver with the narrative of societal collapse, then you've got a grossly irrational market. You aren't supposed to make money investing in a grossly irrational fantasy.

It'll be fun to see how things work out next week - whether there's follow-thru or not. Canada is closed for some stupid holiday on Monday (dunno why they can't just make Valentine's a holiday) - I dunno if the US is closed or not.

Oh - next week I'm off the UI and back to work, so posting from this point onward will be less.

Though I might be looking for a different job - apparently there's a lot of tutoring jobs at the local Foreign Kids Highschool, and that actually sounds like fun.

Mining.com - 2012 preliminary world gold production. China boosted their output by about 40 tons, making up pretty much the entire year-over-year difference. To put it in perspective, 40 tons is a little more than Oyu Tolgoi, or 2.5 B2Golds. And their central bank buys it all anyway.

Bonddad - on France. Their economy was sputtering through January. We'll have to see if Merkel wants anything done about this, or if she wants to head into another election with her country being dragged down by the rest of the Eurozone.

Thursday, February 14, 2013

Our entire system has been captured and we are entering the final stages
of decay and ultimately a day of reckoning where the guilty and
innocent alike will suffer the awful consequences of currency collapse,
death and destruction on a wide scale, and likely civil and world war.

Here's another:

I succeed, therefore I am. And if you do not, well, we shall have to do
something about that drag on the efficiency of the economy and the
maximization of profits. Ah, the burdens of the aristocracy, and their
far flung sahibs.
This essay concerns me greatly, because such thoughts echo throughout
the Anglo-American culture of late. They are whispered in the evolving
mythos of those favored few who enjoy certain völkisch advantages, presumably justified by the nature of their blood.
We have seen this kind of sociology before, as the justification for the
widespread looting of wealth, the ransacking of nations, and the
neglect, ghetto-ization, and murder of marginalized people.

One more maybe?

Never forget that US Dollars (like all other government currencies) are
irredeemable. That means that although you can trade USD for many goods
and services – even gold – in the market today, no bank or government
agency is required to redeem your dollars for anything. At some point,
market confidence in the dollar will fade, and the bid for dollars will
shrink. And shrink some more. And then the bid for dollars will be
withdrawn. That's Zimbabwe Time!

This was all posted in the past couple days by people who have blogs (not just ZeroHedge). While the S&P 500 has flirted with new highs. Of course, the same stuff has been posted by people who have blogs for the past 4 years - ever since S&P 666 - so I doubt any of it is indicative of anything, and therefore none of it is newsworthy in any way.

Life sucks, politics sucks, and the system sucks, sure I agree: but it takes a delusional level of exceptionalism to believe that this time is so much worse than any other time, or that your country is so much more corrupt or doomed than other countries.

1) The actual miners have been lulled by high metal prices to waste loads of money on idiotic things that produce no value, and are now being abandoned by serious investors;
2) The seniors made $50 billion in writeoffs in 2012, so if you're smart you really don't want to put your investment dollars in these people's hands;
3) Grade is down, costs are up, which to the average pro indicates that mining is a doomed sector that you want to completely avoid;
4) The geologist profession has gone so far downhill that 50% of what the "P.Geo" crowd produces is utterly worthless, so nobody trusts the geologists anymore;
5) So many people have been wiped out by bad investments, and so many people now know that the miners grossly underperform the metal, that there's no chance you're going to see new money enter this field for a long time.

Seems getting down to weekly RSI of around 30 is a good re-entry point, at least for a snapback play, just by looking at this chart.

So the mine gets shut down for a while, Rob McEwen couriers out 100 packs of Imodium, eventually they find out it's all being caused by some megalovirus that lives in mines, and then things should be okay again.

Three interesting longer articles for you to ponder while performing your morning constitutional:

Daniel Drezner - The currency war lobby. Interesting point, and something that we often fail to realize - the people crowing about a "currency war" are the people with an interest in it not happening. This is similar to all that complaining about debt: the people most interested in bitching about government debt (how it has to be repaid, how oh no we can't inflate our way out of it the way it's always been done - at least by sovereigns who don't simply default) are the rentier class who live off that debt, and in fact are heavily leveraged off that debt.

Sorry Randroids, but you're being played by Pimco. Speaking of which - if it was okay for Ayn Rand to live off fucking welfare in her old age, because she was "helping destroy the system she hated" (har har), why isn't it okay to default on or inflate away debt to destroy the entrenched Statist-supported plutocracy?

Vancouver Venture - the retail investor's death by a thousand cuts. Basically, this is what happens when you go out and rob every last single investor in your market - eventually all the investors run away and buy something else. Quote:

The current state of Venture Exchange will have a massive effect in Vancouver where brokers and industry players rely on fresh capital to sustain a lifestyle. Maybe after the cleansing occurs risk capital will return, not to sustain a lifestyle for the promoter but to create spectacular return for the risk taking investor.

Til then, I guess, explorecos will continue to suck.

Related to that, I stumbled across the following:

BBC News - Warren Buffett: "I told you so". Now, this is an article from 2001 about Buffett's comments on the end of the NASDAQ bubble, nothing to do with junior miners; but let me just take some quotes out of context for you, and I'm sure you'll hear a little bell go off in your head.

Mr Buffett noted that investors had been hypnotised by the staggering ascent of tech stocks and ignored everything else, including whether the businesses they were investing in were making money. "Value is destroyed, not created, by any business that loses money over its lifetime," Mr Buffett wrote. "The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them." Business models for these companies amounted to little more than "the old-fashioned chain letter", he added.

Doesn't that sound like the junior scene?

So why do you think anyone at Buffett's level of intelligence would ever want to buy a Venture stock?

Biiwii - blah blah gold. I've begun drifting away from reading him, since he seems to be distorting his view with too much Apocalyptic Internet Blogger information and very little real data or news. And it seems he's drifted away from me, since he apparently doesn't know that everything that ever needed to be said about the Credit Suisse hack job was said right here on this very blog.

Mining.com - China's investment in Canada base metals to grow? Heh... interesting, the "China will buy up the world's resources" narrative might be making a comeback. That'd be nice. Then again this might just be entirely the fantasy of one wistful journalist. We'll need to wait and see.

Mineweb - junior financing still hard to come by. Well, considering "financing" means your house taking a free 10% vig that you puke into a thin market after 4-month lockup, and considering 95% of explorecos are utter fucking crooks who have zero competence at advancing a project, should it be a surprise that it's become harder to tap the financiers for hookers & blow money? The juniors don't seem to mind - they'll just do more convertible debenture-based shareholder assrape from Waterton.

The reason is that I want to concentrate on the most important things at this moment, right now that seems to be whether or not we're at a top in the US market, almost every opinion you read on that topic is utter bullshit, the top-callers are easy to ignore because they all have their own political agenda and an abject ignorance of the hard data, and by now you should be able to find Calculated Risk and Bonddad on your own.

Also, Bill Bishop hasn't been posting much in the way of significant China news recently.

FT Alphaville - federal and state spending. Interesting point - one of the bigger headwinds to the US recovery has been extreme cutbacks in State and Federal spending. The State cuts have really been a drag on the economy - but now most states are running budget surpluses, and will be able to start increasing spending again. Meanwhile, the Federal spending cuts (most importantly now the sequester) should already be priced into the market, don't you think? That's my problem with Bonddad et al - they've become very bearish based on information that we already have.

Ritholtz - explaining his position on secular bear markets. He brings up a very important point that you TA newsletter writers should ponder: this time is not like all other times, because the Fed has intervened very drastically to float the equity market. Thus, it might be that the "third crash, of 20-30%" that you expect at the end of a secular bear market hasn't happened because of the Fed.

Here are his important points for those of you who can't be assed to follow the links to articles which I'm only pointing you to because I think they're very important:

7. The FOMC policies of QE/ZIRP are the wild cards. I believe we would have had at least one 20-30% correction but for the last 2 QEs. That washout would have been our 1979-81, and it could have helped set the stage for the end of the Secular Bear.

8. Normally, we should be seeing lower P/Es and even lower interest in Equities. However, we once again look at the actions of the Fed as a complicating factor. This makes interpreting where we are in the cycle, a challenge under normal circumstances, that much more difficult.

9. I don’t know how to interpret the secular bear metrics in light of the Fed’s active intervention in the markets. It is a case of first impression.

All very sensible, and therefore something you really should ponder before drawing your pretty lines. Because today's S&P chart might not be charting the same market that it charted in 2000.

And by the way - don't anyone ever fucking use the "oh, so you think This Time Is Different?" snark on me. I have read the book in its entirety. Have you? No? And have you checked into Rogoff's politics? No? Then shut the fuck up, you smart-assed little cunt.

Monday, February 11, 2013

Oh just give us the stupid washout already.The one that everyone knows is coming.Write a blog post or a tweet about the imminent correction and
everyone retweets you, everyone agrees. The "Correction Camp" is now the
world's largest circlejerk as measured by circumference, according to
Guinness.The chief strategist types are all charting the shit out of this new
surge in optimism and reminding us that every time we get to this place
the market gets crushed immediately afterwards.

Paul Brodsky - blah blah gold. Notable because he's also finally decided to criticize Credit Suisse's dumb gold call. Though his arguments are pretty stupid and revolve around money supply, he's using the same old Ron Paul arguments as the free blogosphere, and he doesn't even have the balls to name CS by name.

On February 1, the Head of Precious Metals Research and the Head of
Strategy for Commodities, Foreign Exchange and (curiously) Asia at a
SIFI bank published a report that called the end of the bull market in
gold, claiming; “the 2011 high will prove to have been the peak for the
USD gold price in this cycle, and that (the) “the beginning of the end”
of the current golden era comes sooner than the Q3 we forecast in
January.” We
believe the timing of the report makes sense, given its provenance, and
that it may be followed by more such reports from SIFI banks,
especially those likely to be short physical bullion vs. outstanding
claims for it they may be obligated to fill.
While no one definitively knows the future and the dollar price of
gold may rise or fall (you know our view and rationale), we are quite
certain gold’s future path will have nothing to do with the arguments
included in this report. Sadly, it was a case study in false identities
leading to wayward causations and, in our view, a diametrically wrong
conclusion.

Brodsky, you're a fucking sissy for not naming names, and it's quite obvious that you got your idea for criticizing CS from my blog. So quit being a pussy and man up. Also, your discourse is nearly incomprehensible.

Sunday, February 10, 2013

I never even hear anything about Atac... I guess Gary Tanashian doesn't follow it anymore.

In any case, the stock price is back to where it was when they didn't have any gold, with gold about 30% higher. I guess a possible inference from this is that Atac really doesn't have any gold, beyond a few specks frozen in an unmineable permafrost a thousand miles from civilization.

I guess the Xstrata-Glencore merger is the nail in the coffin for SBB? Their stock tends to faceplant whenever the merger looks like it's going ahead.

With performance like this, isn't it no wonder that the GDXJ still looks terrible?

And with performance like this, isn't it obvious why all the goldbugs are a bit unhinged?